- Attorney General Josh Shapiro of Pennsylvania announced he will oppose the U.S. Department of Labor's (DOL) pilot Payroll Audit Independent Determination (PAID) program, which allows employers that violate labor laws to report and resolve such violations and pay their workers back wages without the threat of liquidated damages or civil monetary penalties. Shapiro has vowed to prosecute any employer who breaks the law in his state.
- Shapiro belongs to a coalition of 11 states' attorneys general (AGs) who, in a letter to U.S. Labor Secretary Alexander Acosta, laid out what they see as the program's injustices. PAID, among other things, trusts employers to self-audit, self-report breaches and correct wrongdoing without agency oversight, they said.
- The pilot program will run for six months, then undergo an evaluation.
From DOL's perspective, PAID is a win-win voluntary reporting program for all parties involved; employers can report wage and hour violations under the Fair Labor Standards Act (FLSA) without the threat of civil monetary penalties or liquidated damages, and employees receive the back pay they're owed. But like the AG coalition, businesses and their advocates have strong concerns about the program, although for different reasons.
Businesses are worried that, among other things, the program could paint a target on their backs, while workers' rights advocates believe employers might get a "free pass." DOL recently released a FAQ to address some of these concerns, but the AG coalition certainly complicates matters — especially as it relates to PAID's interaction with state law.
DOL officials said they recognize the agency's limitations under state laws, but one former official said employers received assistance in a similar program years ago in a collaborative exchange. New York's AG Eric T. Schneiderman previously said that won't happen in his state — a warning that could now spread to the entire AG coalition. In light of these complications, PAID will remain a key compliance factor to watch in the coming months.